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Cautionary Announcement Relating to Offer to Subscribe for Shares, Withdrawal of Resignation, Further Board Changes
PEMBURY LIFESTYLE GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2013/205899/06)
(“PL Group” or “the Company”)
ISIN Code: ZAE000222949 JSE Code: PEM
DETAILED CAUTIONARY ANNOUNCEMENT RELATING TO AN OFFER TO SUBSCRIBE FOR SHARES BY
VERITYHURST PROPRIETARY LIMITED (“VERITYHURST”), WITHDRAWAL OF RESIGNATION OF FINANCIAL
DIRECTOR AND FURTHER BOARD CHANGES
Shareholders are hereby advised that, subject to certain conditions precedent, the board of
directors of the Company (“Board”) has accepted an offer from Verityhurst (“Offer”) to enter into
a loan and share subscription agreement (“Share Subscription Agreement”) in terms of which
Verityhurst has agreed to subscribe for 180 000 000 ordinary PL Group shares (“Subscription Shares”)
for cash at a subscription price of 10.5 (ten point five) cents per share (“Subscription Price”) for a
total consideration of R18 900 000 (“Share Subscription”).
As PL Group is currently suspended, it is the intention of Verityhurst to assist with the settlement of
certain key creditors and to inject working capital into the PL Group, which amounts will be
recorded as a loan amount (“Initial Loan”), and which loan will form part of the Share Subscription.
The Initial Loan will be directed, inter alia, to ensure that the audit for the year ended 31 December
2019 is finalised, which would include the acquisition of the claims from the former auditors,
payment to the current auditors and IFRS advisor and to ensure that the PLG Schools operations
are properly funded, with a particular focus on the teaching and support staff.
Any amounts advanced or claims acquired will be recorded as a loan in the books of the Company
until such time as the JSE Limited (“JSE”) has lifted the suspension of trading in the Company’s shares.
Thereafter the Company will, as soon as possible, obtain approval from the JSE for the allotment
and issuance of the Subscription Shares to Verityhurst and the Initial Loan will be capitalised.
The Share Subscription will be effected in terms of the general authority to issue shares for cash,
which approval was granted by PL Group shareholders at the Company's annual general meeting
held on 4 July 2019 and will constitute 30.2% of the number of equity securities in issue after this
general issue.
Verityhurst is an investment holding company with investments in the forestry, transportation,
education, and agriculture sectors, and is passionate about education, in particular. The PLG
Schools are of particular interest to Verityhurst due to the focus area of affordable private
education.
Verityhurst is not considered to be a related party to PL Group in terms of the JSE Listings
Requirements.
The Subscription Price is at a 9.44% discount to the 30-day volume weighted average share price
(“VWAP”) of 11.5949 (eleven point five nine four nine) cents per share at 30 June 2020, being the
last date of trade prior to the suspension of the Company on the JSE, with the closing price at 30
June 2020 being 10 (ten) cents per share and the price agreed to by the Company and Verityhurst
being 10.5 (ten point five) cents per share.
The Subscription Shares will rank pari passu with the existing shares in issue and are of a class already
in issue.
The Share Subscription will primarily be applied to working capital and settlement of creditors.
Suspensive Conditions
The Share Subscription is subject to the fulfilment or waiver (if applicable) of the following conditions:
- the signature of a Subscription Agreement on or before 31 July 2020;
- the immediate disposal of the PLG Retirement Villages subsidiary at R1.00 to Mr AR
McLachlan, his nominee or a third party, which is currently reflected in the PL Group results
as discontinuing operations, is incurring monthly losses and has liabilities in excess of
R20 million;
- the listing of the Subscription Shares on the JSE within five business days of the lifting of the
suspension of trading in the Company’s shares; and
- the restructure of the Board.
Board Restructure
In compliance with paragraph 3.59 of the JSE Listings Requirements, shareholders are notified of the
following changes to the Board:
- Mr P Barnard has tendered his resignation as a non-executive director of the Company with
effect from 31 July 2020;
- Messrs AR McLachlan, the Chief Executive Officer and an executive director of the
Company, and J McLachlan, a non-executive director of the Company, have agreed to
step down from the Board with effect from 15 August 2020; and
- Mr J Labuschagne, who had previously tendered his resignation from the Board with effect
from 31 July 2020, has agreed to withdraw his resignation and will assist with the completion
of the year end audit.
Mr S Nielson will remain on the Board to provide continuity of information on the schools’ operations,
at least until the end of December 2020.
Verityhurst will nominate new directors to the Board, including a new CEO, to ensure the
appropriate composition thereof and also to properly constitute the Audit and Risk Committee. A
further announcement of these appointments will be made during the next two weeks. If necessary,
the Company will appoint an interim CEO whilst it seeks to appoint an appropriate candidate as a
permanent CEO to grow the PL Group.
Other matters
Should additional funding be required, the Offer also provides for a potential rights offer of up to
R50 million (“Initial Rights Offer”), which amount will be assessed post the issue of the Annual Report
for the year ended 31 December 2019 and the lifting of the suspension of trade in the Company’s
securities. The Initial Rights Offer will be partly or fully underwritten by Verityhurst. To the extent that
shareholder approval is required, Mr AR McLachlan will procure that he and his associates will
irrevocably undertake to vote in favour of any required resolutions and not to follow their rights in
relation to such Initial Rights Offer.
Verityhurst has also reserved the right to acquire and/or to nominate one or more third parties to
acquire 100 million existing shares from Mr AR McLachlan, the controlling shareholder, at the closing
price of 10 cents per share, which agreement will be entered into post the resignation of Mr AR
McLachlan. The intention behind this agreement is to enable Verityhurst to acquire control of the
Company without further diluting the minority shareholders, prior to the potential Initial Rights Offer,
which, if proceeded with, will provide minority shareholders with the same right to subscribe for
additional shares in PL Group.
Verityhurst and the Company may, by written agreement concluded between them on or before
the date specified for its fulfilment, extend the date specified for the fulfilment of the suspensive
conditions set out above.
In the event that Verityhurst acquires 35% or more of the issued share capital of the Company, either
by way of acquisition or through underwriting the Initial Rights Offer, Verityhurst will be required to
extend a mandatory offer to the remaining shareholders of the Company in accordance with the
provisions of the Companies Act, No. 71 of 2008 read with the Companies Regulations, 2011
(“Mandatory Offer”). In such instance, Mr A McLachlan and his associates will provide an
irrevocable undertaking not to accept the Mandatory Offer in relation to any remaining shares held
by them.
Strategy
The intention will be to rebrand the PLG Schools in the near term to Verityhurst Academies and to
later change the name of the Company, in conjunction with the proposed acquisition of the
Verityhurst Academy.
Cautionary Announcement
Shareholders are advised to exercise caution when dealing in their shares until a further
announcement is made.
By order of the board
Johannesburg
30 July 2020
Designated Advisor Corporate Advisor to Verityhurst
Merchantec Capital AcaciaCap Advisors
Date: 30-07-2020 07:05:00
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